China on the Offensive
How the Ukraine War Has Changed Beijing’s Strategy
The world’s agricultural and food systems face a perfect storm. Overlapping crises, including the ongoing COVID-19 pandemic, wars in Ukraine and elsewhere, supply chain bottlenecks for both inputs like fertilizer and outputs like wheat, and natural disasters induced by climate change have together caused what the United Nations has called “the greatest cost-of-living crisis in a generation.” World leaders cannot afford to ignore this unfolding catastrophe: rapidly increasing food prices not only cause widespread human suffering but also threaten to destabilize the political and social order. Already, along with skyrocketing energy costs, surging food prices have helped bring about the collapse of the Sri Lankan government.
But storms are increasingly predictable, and severe damage from them is therefore increasingly preventable. This is true of the current food crisis as well as extreme weather events. Political and business leaders have for too long ignored key fissures such as insufficient safety net coverage and lags in agricultural and policy innovations that leave agri-food systems—and the billions of people whose lives or livelihoods depend on them—vulnerable to the effects of other calamities. If the global response to the current food emergency likewise neglects these critical points, it may inadvertently exacerbate underlying problems, worsen and prolong unnecessary human suffering, and accelerate the arrival of the next perfect storm. Conversely, serious efforts to address not only the current crisis but also the long-standing issues that have helped cause it could move the world toward healthier, more equitable, resilient, and sustainable agri-food systems. World leaders and international organizations have a chance to make food emergencies and widespread acute hunger problems of the past; they must not let this crisis go to waste.
The clearest evidence that the world is in the throes of a food emergency is the spike in food prices: the Food and Agriculture Organization of the United Nations estimated that global food prices were 23 percent higher in May 2022 than they were a year earlier. Moreover, they are now more than 12 percent higher than at the peak of the 2008–12 global food price crisis, a disaster that cast tens of millions of people back into poverty and sparked political unrest in dozens of countries. Indeed, the social and political upheaval across the Middle East that led to the 2010–11 Arab uprisings was partly driven by the high cost of food.
Dramatic increases in food prices pose severe health risks, including acute malnutrition or even famine, particularly in the developing world. According to the World Food Program (WFP), a record number of up to 323 million people are now, or are at risk of soon becoming, acutely food insecure (the technical term for nutrient intake deficiencies that puts a person’s life or livelihood in immediate danger). In more than a dozen desperately poor countries—Afghanistan, Angola, Burkina Faso, the Central African Republic, the Democratic Republic of the Congo, Ethiopia, Haiti, Kenya, Niger, Somalia, South Sudan, Sudan, Yemen, and Zimbabwe—hundreds of millions of people already face severe food insecurity. In the absence of adequate, appropriate, rapid humanitarian response, many people will die unnecessarily.
The world is in the throes of a food emergency.
There is more than enough food in the global system to go around. Even amid the current crisis, global daily food supplies average roughly 3,000 calories, 85 grams of protein, and 90 grams of fat per person, far exceeding human metabolic needs for a healthy life. The core drivers of hunger and malnutrition are poverty and maldistribution, including excessive food loss and waste, not insufficient agricultural production. Today, roughly three billion people are too poor to afford a healthy diet and perhaps a billion more could soon suffer similarly. Higher food prices disproportionately hurt the poor for the simple reason that they spend a far larger share of their income on food. Without adequate safety nets, preferably ones that are triggered automatically for people with incomes below a certain threshold or when food prices rise too high, people suffer unnecessarily.
History and the current crisis sadly show that Western politicians’ discretionary responses routinely prove insufficient and may even aggravate existing inequities. In Ukraine, for instance, the global humanitarian response has been laudably swift. As a result, it is not among the countries facing food emergencies, despite the fact that Russia’s invasion has driven more than 12 million Ukrainians from their homes. Nor are high food prices causing mass hunger among displaced Ukrainians. Yet in Yemen, which has suffered a terrible civil war for eight years, the WFP estimates that a record 19 million people are food insecure. If the international community were equally generous where brown-skinned peoples similarly face war and acute food insecurity, the global food system would have adequate supplies to address the problem.
If the international community is serious about addressing the food crisis—and about fixing a global agri-food system that leaves vulnerable and marginalized communities unevenly exposed to hunger and famine—it must build better safety nets. Food price spikes only cause mass malnutrition when safety nets are inadequate. The world has ample food supplies to feed everyone a healthy diet, even in the face of natural and manmade disasters. But it lacks mechanisms to trigger responses that equally protect people in locations less geopolitically important than Ukraine, or among populations of the so-called global South that may be less visible to leading Western governments. Establishing automatic global safety nets, through a combination of financial arrangements contractually triggered by disasters and treaty commitments among governments, could build effective safeguards that are increasingly needed with climate change.
The G-7 countries just pledged an additional $4.5 billion for emergency global food assistance, which sounds generous. Unfortunately, that brings global commitments up to only $14 billion, less than one-third of the $46 billion in current total humanitarian appeals worldwide. And international aid is down amid the pandemic. The massive costs that governments have shouldered to fund domestic COVID-19 responses have understandably limited humanitarian spending abroad. But penny pinching by the world’s richest countries risks precipitating crises in the coming years that could be far greater, in both monetary cost and human suffering, than the current crisis.
Policymakers must also work to address humanitarian emergencies promptly and fully, or risk downstream crises that could be far more serious. Ignoring food emergencies doesn’t make them go away nor cheaper to address later. In fact, it often leads to more challenging problems that are more difficult to tackle, mostly because higher food prices and greater acute food insecurity are strongly associated with forced migration. When people grow desperate to feed their families, they take risks, most commonly by fleeing their homes. Any humanitarian agency can attest that it’s far more expensive to meet the needs of displaced people than it is to help people in their own homes before circumstances compel them to leave. And the number of displaced people is growing. At the end of 2021, a record 89 million people had already been forcibly displaced, even before Russia’s invasion drove 12 million Ukrainians to flee their homes.
There is more than enough food in the global system to go around.
Moreover, the failure to address humanitarian needs incurs there steep sociopolitical costs, both for countries that need assistance and for those that might provide it. High food prices lead to an increased risk of conflict and political unrest in countries with weak social safety nets. Roughly four dozen countries experienced domestic political unrest or civil war during the 2008–12 global food price crisis. Governments in Haiti, Libya, Madagascar, and Tunisia fell, sometimes violently, and protracted civil wars erupted in Syria and Yemen.
Those problems can also spill over into high-income countries. Europe’s migrant crisis began in 2011 with mass unrest across North Africa and West Asia over spikes in food prices; it culminated in 2015 when waves of Afghanis, Iraqis, Syrians, and others fleeing civil war sought refuge in Europe. The nationalist, anti-immigrant domestic political response that predictably followed heralded a distinct rightward shift in European—as well as U.S.—politics over the last decade. Russian President Vladimir Putin may be looking to replicate Europe’s migrant crisis by aggravating the preexisting global food crisis.
Indeed, Russia’s invasion of Ukraine didn’t cause the food price crisis so much as it aggravated an already existing problem. Global food prices were already rising quickly before the war. Although food prices fell during the very beginning of the pandemic, they rose rapidly through last year—in October 2021, they blew past the December 2010 prior global food price record. Russia’s invasion of Ukraine and blockade of its Black Sea ports certainly accelerated this trend by disrupting wheat, sunflower oil, maize, and fertilizer exports, driving global food prices up 18 percent just from January to March 2022. Nonetheless, global food prices peaked a month into the invasion and have since tapered off slightly in response to reasonably favorable growing conditions in other major producing countries, the rising risk of recession in major economies, and an agreement to open a Black Sea corridor to evacuate Ukrainian export commodities. This is because the supply shock arising from the Ukraine war is relatively small. Of the roughly three billion tons of grain produced globally each year, the loss of perhaps half of Ukraine’s exports—which is likely the upper bound—implies a supply shock of less than one percent. That’s less than what was lost to the severe 2012 drought in the United States’ Midwest—not enough to cause a crisis.
As they craft a response to the current food emergency, policymakers should also assess the need for a global agreement to tie governments’ hands when domestic political forces agitate for export bans. Russia’s invasion of Ukraine was not the only cause of the February–March rise in food prices. Ill-advised export bans by a few major food-producing countries looking to insulate domestic consumers from rising global market prices also contributed to this spike in costs. India banned wheat exports, Indonesia blocked palm oil exports, and China prohibited the export of agrichemicals. Repeating errors made during the 2008–12 global food price crisis, several governments caved to domestic political pressures and imposed export bans in the hope that they could prevent global price shocks from affecting domestic markets. Such policies inevitably quickly fail. Meanwhile, bans temporarily fuel faster and greater—if short-lived—price increases among importers that must scramble to find new suppliers to fill interrupted supply chains, temporarily jacking up prices in the process.
Only about one-quarter of the food consumed globally depends on international trade. Trade doesn’t feed the global population so much as it stabilizes prices, dispersing varied demand and supply shocks across the world quite effectively. No nation can be reliably self-sufficient and adequately nourished. The world needs orderly trade regimes to absorb the shocks that inevitably occur, especially as climate change progresses. The World Trade Organization (WTO) was created during a period of steadily falling real food prices; they hit an all-time low in December 1999. Because its rules were negotiated during an era of falling prices, the WTO has effective tools to limit governments’ ability to indulge domestic political pressure for protectionism around imports that lead to lower prices. But when prices rise, the protectionist impulse concerns exports, not imports, and the WTO lacks corresponding agreements to constrain governments’ ability to restrict exports. New trade agreements to rectify this oversight are needed if the world is to get a handle on food prices.
Policymakers must also recognize the urgent need to promote innovation in agri-food systems. Through greater investment in research and development and more creative policies, it would be possible not only to boost agricultural productivity but also to reduce food loss and waste, and the demand for agricultural commodities as livestock feed and transport fuel, rather than food. An enormous structural problem in the agri-food system is that demand for grains and oilseeds for biofuels, and especially for animal feed, has grown far faster than the demand for food.
Public agricultural research and development has a very high return on investment. Yet U.S. public investment in agricultural research has fallen by one-third over the past two decades, and ongoing investments remain heavily concentrated in refining traditional crops and methods. Part of the problem is that governments and policymakers often look for short-term results, whereas the most effective agri-food innovations pay off handsomely over years and decades. Among long-term innovations, governments should be investing in circular systems that can recycle waste products into fertilizers and feed; controlled environment agriculture that can reduce land, pesticide, and water use and crop loss to pests and pathogens; and alternative proteins that can produce healthy, tasty products at a fraction of the agrichemical, land, and water costs of current systems. They must also push for the institutional and policy innovations that can encourage private investment in these new technologies.
There are steep sociopolitical costs to the failure to address humanitarian needs.
Private investment in agri-food systems is far larger than state investments but only slightly better, tending to concentrate on luxury goods and services rather than on projects that could address high food prices and mass acute food insecurity. Although rising food prices in 2021 boosted venture capital agri-food tech funding up to $52 billion, an 85 percent increase over 2020, the largest single category was online grocery shopping. Although it is an understandable response to COVID-19 lockdowns, fancy delivery apps do little to nothing to reduce food insecurity, greenhouse gas emissions, biodiversity loss, or water stress, and they may aggravate the global obesity epidemic.
The estimated $26 billion it would cost to eliminate global hunger represents less than one percent of the $2.7 trillion in cash on hand in early 2022 among the 500 companies listed on the S&P index. If governments built policy and institutional innovations to attract even a modest fraction of that money to tackle the underlying imbalances that leave the world vulnerable to perfect storms like the one it faces now, that would be a game-changer for accelerating agri-food systems transformation. Real leadership—from the private, philanthropic, and public sectors—will manifest in championing smart and substantial investment in agri-food systems transformation.
Like extreme weather events, perfect storms that cause mass acute food insecurity are happening more and more often. It took 35 years for the world to experience another food crisis after 1973–74, but less than a decade after the 2008–12 disaster for the current emergency to hit. Policymakers, international organizations, and the private sector must develop an appropriate, timely, and sufficient humanitarian response regime—not only to avoid unnecessary human suffering now but also to address the larger-scale, longer-term challenges that leave the world increasingly vulnerable to food crises precipitated by a wide range of shocks. These key points—safety nets, immediate action, limits on export bans, better research and development, and thoughtful investment—must guide public and private policy. Policymakers must address the immediate global food emergency with prompt and generous humanitarian aid and orderly international trade. They must also marshal the major research and development investment and policy and institutional innovations necessary to bend the arc of agri-food systems away from increasingly frequent and calamitous crises and toward a healthier, more equitable, resilient, and sustainable world.
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